From Freight Waves

More than 40% percent of all e-commerce flows through Amazon; FedEx, UPS worry they may lose delivery business

E-commerce giant, Inc. announced plans to push further into last-mile delivery services, in an effort to address the continued surge in online shopping and residential deliveries.

The retail giant unveiled a new program to partner with entrepreneurs and small businesses to deliver Amazon shipments to its growing pool of online customers.

For a minimum investment of $10,000, individuals can lease up to 40 Amazon-branded delivery vehicles to deliver packages.

The company also said that under this program they would provide:

  • uniforms,
  • insurance programs and
  • fueling programs for potential fleet operators.

The company is considering offering tax and payroll courses to assist new entrepreneurs that partner with the company.

This program would be separate from Amazon’s existing Amazon Flex program, which pays individuals between $18 and $25 dollars to deliver packages for the company using their own vehicles.

The company estimates that an individual operating a 40-vehicle fleet could earn up to $300,000 per year under this new program. Amazon said that they hoped for hundreds of new partners to sign up for the program in more than two dozen states over the next 18 months. If the program is successful, the company expects to roll it out into more states and other countries going forward.

“More than enough for everybody”

This new program represents a potentially significant expansion of Amazon’s own delivery capabilities and further complicates its relationship with parcel carriers UPS, FedEx, and the USPS.

Historically, Amazon has relied heavily on existing carriers to help fulfill increasingly fast delivery commitments as the company expanded its Prime delivery services and distribution network. In fact, Amazon has recently come under fire from the Trump administration for its use of the USPS for a large chunk of last-mile delivery at relatively low cost.

As such, many may view this new program as a way for Amazon to break away from the traditional small package carriers and begin a full-fledged delivery service.

Amazon has noted the risks associated with leveraging external partners for its delivery service in the past, and has seen shipping costs nearly double from 2015 to 2017. Shares of UPS (UPS: NYSE) and FedEx (FDX:NYSE) both tumbled more than 2.5% in the aftermath of the announcement.

For its part, the company continues to downplay any plans to disassociate from any of its current parcel shipping partners, instead framing this move as an effort to combine with existing partners to meet surging demand.

“There’s so much growth here in parcel delivery that there’s more than enough for everybody. We need to build more of our own capacity,” noted Amazon senior vice president of worldwide operations Dave Clark.

“We use everything in order to meet our scale and meet our needs. I don’t see that changing in the future,” he said.

There is certainly enough evidence to suggest that this is the case. E-commerce remains one of the steadiest, fastest growing areas in the entire economy, with double digit growth in every year of this current expansion.  Analysis from Slice Intelligence last year showed that Amazon’s share of online purchases continues to grow, and more than 40% percent of all e-commerce flows through Amazon.

Amazon’s traditional carrier partners have taken steps to expand their networks, but have also struggled to keep up with the rapid increase of residential delivery, particularly during the peak holiday season rush.  As a result, this new program could be seen as just another way of adding overall capacity a market that is constantly asked to deliver more at a faster pace.

Still, it’s hard to ignore the threat that Amazon poses should it ever decide to completely break off relationships with existing major carriers, or in a more extreme case, actually begin delivering non-Amazon packages.

This new program may not be geared towards establishing a full-fledged Amazon delivery company, but it serves as a reminder of what could be in the long run.

From Amazon

Wanted: Hundreds of Entrepreneurs to Start Businesses Delivering Amazon Packages
Amazon continues its long-time commitment to supporting small businesses with an innovative new offering that helps individuals build their own delivery companies

Over time, Amazon will empower hundreds of new small business owners to hire tens of thousands of delivery drivers across the U.S., joining an existing community of Delivery Service Partners

Amazon commits $1 million to fund startup costs for eligible military veterans to start their own delivery businesses

SEATTLE–(BUSINESS WIRE)–Jun. 28, 2018– (NASDAQ:AMZN) – Amazon announced today the launch of a new offering that helps entrepreneurs build their own companies delivering Amazon packages. Amazon will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business. Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance. Over time, Amazon will empower hundreds of new, small business owners to hire tens of thousands of delivery drivers across the U.S., joining a robust existing community of traditional carriers, as well as small-and-medium-sized businesses that already employ thousands of drivers delivering Amazon packages.

The offering provides technology and operational support to individuals with little to no logistics experience the opportunity to run their own delivery business. To help keep startup costs as low as $10,000, entrepreneurs will also have access to a variety of exclusively negotiated discounts on important resources they’ll need to operate a delivery business. The deals are available on Amazon-branded vehicles customized for delivery, branded uniforms, fuel, comprehensive insurance coverage, and more.

Amazon is constantly looking for hands-on leaders who think big and deliver results for our customers. These principles are very familiar to those who have served our country in the armed forces. The company is committing $1 million towards funding startup costs for military veterans, offering $10,000 reimbursements for qualified candidates to build their own businesses.

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” said Dave Clark, Amazon’s senior vice president of worldwide operations. “Customer demand is higher than ever and we have a need to build more capacity. As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

“I had prior experience running my own business but not in logistics,” said Olaoluwa Abimbola, one of Amazon’s beta participants in the new offering. “I was driving for Amazon Flex when I learned about the opportunity to start my own delivery company. Backed by Amazon’s resources and logistics experience, and its encouragement to ‘learn while I earn,’ this opportunity was a no-brainer. In just five months, I have hired more than 40 employees, and it’s encouraging to know that any driven individual can use Amazon’s support and the Delivery Service Partner community to build a successful, thriving business.”

Amazon has a long history of supporting businesses of all sizes connect with customers around the world. The creation of Marketplace, which uses Amazon’s websites and logistics operations to connect customers with third-party sellers, has enabled more than 140,000 small-and-medium-sized businesses to do more than $100,000 in sales. Today, more than half of all the items sold on come from third-party sellers. Amazon has also developed technology, devices and services, such as Kindle Direct Publishing and Amazon Web Services (AWS), that benefit authors and developers who operate as small businesses. With today’s announcement, Amazon will help entrepreneurs in a new way, by empowering them to build their own delivery businesses. This new Amazon offering continues the company’s longtime commitment to enabling small-and-medium-sized businesses to grow with the rising tide of e-commerce.

To learn more or get started today, visit

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit and follow @AmazonNews.


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